A federal judge in San Antonio ruled Monday that federal wage and hour provisions cannot legally be applied to the operation of public transit systems, as Labor Department regulations had directed.

The case is of significant interest to transit officials nationwide, who feared having to pay much higher wages if they were subject to the Fair Labor Standards Act.

"We know it's in the multimillions of dollars," said Donald Bliss, an attorney for the American Public Transit Association, which intervened in a suit by the San Antonio Metropolitan Transit Authority against the Labor Department.

This was the second time that U.S. District Court Judge Fred Shannon has ruled in favor of the transit authorities. The Supreme Court remanded the case to Shannon after it ruled last year that the Long Island Rail Road--once a privately owned venture now operated by New York's Metropolitan Transportation Authority--is subject to the Railway Labor Act.

The Long Island is a railroad, not a bus system, Shannon wrote, and said in a footnote that "bus systems must be distinguished from railroad lines on the basis of the absence of a history of federal regulation."

In the body of his opinion, Shannon chronicled a long history of state regulation in public transit--regardless of whether the systems were privately or publicly owned. States have for years regulated fares, routes, schedules, franchising and safety, Shannon wrote.

Almost all major transit systems have shifted from private to public hands in recent years and are now supported substantially by taxpayer subsidies. The public interest in transit pre-dated that shift, the judge found.

If the ruling survives an anticipated appeal directly to the Supreme Court, transit will be placed in the same category--exempt from federal wage and hour standards--as other local and state government functions, such as hospitals, parks and police departments.

The Labor Department declined comments until the opinion has been studied.

The case does not apply to Washington Metro, according to its attorneys, because of its unusual status as an interstate compact agency that is, by law, exempt from federal regulation.